Friday, February 25, 2011

Massachusetts Permits Design Professionals to File Mechanics Liens

Massachusetts has extended mechanic's lien rights to architects, engineers and other design professionals. The law, which was signed by Mass. Gov. Deval Patrick on January 5, 2011, becoming effective on July 1, 2011, allows architects, other design professionals, and project managers to place a mechanic's lien on property if they are not paid for their services. The elements of the new Massachusetts mechanics lien law include:
• The professional must record a notice of contract and a statement of account in the local registry of deeds. Deadlines are the same as those required for contractors, subcontractors and suppliers. The filings must be completed within 60 days after recording a notice of substantial completion or within 90 days of last providing professional services, whichever is earlier.
• Consultants that do not have a contract with the owner must have been approved in writing by the property owner.
• If there is a distribution after a property sale to satisfy more than one lien, the contractor and subcontractor lien claimants are to be satisfied before distributions to designer lien claimants.

According to an article entitled Design professionals may file mechanic's liens in Massachusetts written by Stanley A. Martin, Esq. of the law firm Duane Morris, “the new law was promoted by the Boston Society of Architects and American Institute of Architects / Massachusetts, and was reportedly negotiated by subcontractor and lender groups at the table. Proponents of the law have told the construction community that, when placing liens, they would become ‘the canary in the coal mine’ for the benefit of contractors and subcontractors, and that may be the situation. However, an owner-architect dispute leading to a lien claim by the architect may also stop the flow of construction funds, potentially adding a new wrinkle to the process. That may give rise to issues in implementing the new lien rights.”

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